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Thread: VAT implication on "common" fringe benefits

  1. #1
    Silver Member
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    Apr 2011
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    VAT implication on "common" fringe benefits


    There is an input VAT implication on fringe benefits as well. How do you practically apply this in your day to day? The following fringe benefits are in place:

    - Medical aid paid on employee's behalf
    - Use of company motor vehicle (during the day mostly used for work, after hours may be used privately)
    - Company Cellphone

    Your thoughts?

  2. #2
    Full Member tax$$$'s Avatar
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    Jun 2011
    Northen Cape
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    It depends on whether the employer bears all costs and if the company only makes taxable supplies. Assuming this the VAT should be calculated as follows:
    Medical Aid Benefit = No Vat implications (Exempt)
    Use of Company Car = Vat on 0.3% of determined vale (ie lesser of cost or market value at commencement) - assuming this is a motor vehicle as defined
    Company Cellphone = Vat on 15% of the determined value, except if the employee mainly uses the phone for business purposes.

    The fringe benefits as well as the Vat are calculated at month's end. I'm not sure what you mean by practically apply however?

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